The psychology of pricing

[Joseph R.]

This is sort of a weird question but bear with me......I work for a builder and am also an investor on one of our projects - we do new construction spec builds in higher end areas usually between 1M-2M......we've been sitting with our house a little longer then we expected at this point - we dropped the price 70,000 from the initial listing price and am contemplating our next move if we don't get bites in the next couple weeks....my question is how much of a drop is worthwhile? For example say a house is 1.1M - if you drop the house to 1,090,000 (10k drop) do you think this accomplishes anything? I don't think this brings in a new set of buyers but does show realtors that we are willing to work with a lower priced offer.....on the flip side lowering if in 50k increments brings in new buyers but also costs us 40k over the 10k drop......I'm not sure if there's a right answer here but would love to get some feedback.

[JOAN DICKIE]

I'm my eyes, all a 10,000 drop means is that you are trying to get your listing to show up on people's auto email again.  Such a tiny drop in price doesn't indicate that you are willing to work with lower price offers.  It means to me that you are being tight and very possibly difficult to negotiate on price. 

How much is it costing you to hold it for another 3months?  Figure that in your price drop.  Have you rerun current comps to make sure you are still in line?  Are the features in the house in line with the neighborhood competitions?  Have you tried luxury open houses, like wine and cheese hours.  Is it staged so you could have an evening open house to show what it would be like for buyers to come home to their new home?  Coordinate with a local music quartet to play at the home as a fund raiser and advertise the heck out of it ( as a fund raiser, not the sale of the home).  Just a few ideas to get traffic to your property.